ACCI Conference 2024

Third-party-operated food order and delivery services became more popular during the COVID-19 pandemic because of the need for social distancing. Many small food service businesses rely on third-party services, such as Uber Eats and DoorDash, to receive online orders and offer delivery because they do not have the ability to provide these services. However, these services come with a cost. Both consumers and food service businesses need to pay for the services. In many cases, consumers have no knowledge about the service fee paid by the food services to the third party. This study examines how the information related to the commission paid by the food service providers to the third party affects consumers' willingness to pay for food delivery. A choice experiment was conducted online. In the experiment, consumers were randomly assigned to a control or treatment, which gave different information about the commission rates. A mixed logit model was used for data analysis. The results show knowing the commission rates charged to the food service by the third party affects consumers' willingness to pay for online food orders.

Author(s): Ye Su, Jasper Grashuis